Is it the need to use development funds for ‘other purposes’ (as opposition politicians and economists often complain) or simply that there is too much interference by donors that anger and frustrate government officials who are vociferous critics of conditions attached to project loans?
If at all, Treasury Secretary Dr P.B. Jayasundera belongs to that ‘blunt talking – to hell with the wind’ kind of dictum.
In a non-dependent world where Sri Lanka doesn’t need to rely on any, repeat, any external agency or government not only for its development needs but the day-to-day cash-flow needs of the administration, this kind of tough-talking stance (that we generally blame the West for) isn’t an issue. But are we in such a position, given our large scale dependency on - be it to the US or Europe or in recent years, India, China, Iran, Libya, etc?
Economists and businesspersons have privately described Dr Jayasundera’s administrative style as too blunt when taking on donor agencies and true to form, this week he virtually lambasted the country’s development partners.
In a no nonsense tone, according to many participants at a World Bank-hosted event on Monday, the politically, powerful Treasury Secretary who has survived four leaders – Ranasinghe Premadasa, Chandrika Kumaratunga, Ranil Wickremesinghe (when he served as head of PERC) and now Mahinda Rajapaksa – told development partners that they have no right to dictate terms to recipient countries.
As far as Sri Lanka is concerned, his message was, “We welcome your aid but we won’t tolerate the conditions attached to aid.” In other words it means ‘take your money and run if they come with conditions”.
Jayasundera is absolute right in saying that donors should not dictate terms and attach strings to funds. However, what is of concern is the tone and demeanour in expressing such thoughts at a time when Sri Lanka has few friends outside, and particularly during the current UN Human Rights sessions in Geneva where it is facing a US-backed resolution country on governance and accountability during the last stages of the civil conflict.
Most rational-minded people agree that the country doesn’t need this kind of statements that could further antagonize donors and multilateral agencies. Sri Lanka is the midst of a growing economic crisis which is hurting the very people that the Rajapaksa administration relies on – masses (man-on-the street, farmers, fishermen, housewives) – and foreign funds is what of the ways of getting out of this economic quagmire. In a July 4, 2010 editorial headlined ‘Missiles over Sri Lanka’, the Business Times raised almost identical issues on the way to deal with donors. Excerpts:
“Seven years ago (in 2003), the local heads of the world’s biggest multilateral agencies made an interesting observation at the annual sessions of the Sri Lanka Economic Association. World Bank’s Peter Harrold, ADB’s John Cooney and IMF’s Jeremy Carter in separate presentations arrived at a common consensus (whether by design or being just a coincidence, one never knows), saying:
‘Sri Lankan officials lack good negotiating skills and tact in dealing with multilateral agencies when negotiating soft loans or grants.”
The point was that officials should be able to object, oppose or give good reasons for doing so when not in favour of proposals brought by these agencies. The three officials used this forum to drive home this point due to public agitation at that time that these agencies were imposing their will on Sri Lanka. “Don’t point fingers at us: Develop good negotiating skills and oppose when needed instead of agreeing to everything we say,” was the point made.
The need for skillful negotiations and finesse in international diplomacy comes to the fore once again in the latest, three-pronged crisis that Sri Lanka is facing at the moment. On Thursday, July 1 the deadline ended for sending a written undertaking to the European Union agreeing to a host of conditions including continuation of the now-stalled independent commissions, in lieu of winning a 6-month extension of the GSP+ facility.
There is no escaping the fact that we need the West more than it needs us. So why annoy and rile the West for nationalistic pride? Why not develop the (late Foreign Minister) Lakshman Kadirgamar doctrine of hitting the West in a powerful but effectively presented manner and (still) continue friendship and relationships.
It’s time someone knocks some sense into the government, not to resort to a verbal fire-fight with the international community. We need to have a set of competent negotiators – a kind of fire-fighting unit – who would douse the flames instead of fuelling the fire as it is now. Ultimately any fallout with the EU, the UN and the US would be Sri Lanka’s loss, and an economically, painful one.”
This is still very valid today. Here are some hard economic facts and why Sri Lanka needs persuasive and tactful diplomacy rather than confrontation:
* Iran is our biggest buyer of tea with 28 million kgs in 2010 but that market is under threat of US sanctions.
* In garments, Europe purchased $187 million worth of goods while the US bought $153 million of goods, together accounting for 91 % of the total value of exports of $374 million. Can we afford to antagonize them?
* Foreign loans in 2010: Sri Lanka received Rs 15.2 billion and paid out Rs 16.8 billion, loan payments being more than receipts.
* Outstanding foreign debt by end 2010: Japan - Rs 470 billion, ADB - Rs 344 billion, IDA (World Bank) - Rs 281 billion and China -Rs 103 billion.
The fact remains that Sri Lankan needs its development partners more than they need us. For example was it wrong for the IMF to warn about foreign reserves being drained out by protecting the Rupee? Can we afford to tell them – take your money and run?
Furthermore Iran, a key ally, has lost its economic clout after the imposition of US sanctions; India is miffed over many issues including the delay in a political settlement while another ally, Libya has collapsed. Sri Lanka’s other friends in the Middle East (and elsewhere) are pre-occupied with their own economic and social problems.
Only China remains a powerful economic partner though it was also disturbed by the CATIC issue where the company was refused outright sale of land whereas Shangri-La was given this privilege.
Sri Lanka’s top bureaucracy – and for that matter Ministers whoever they may be -, need to follow a strategy of a firm approach on these issues to the point of not offending and antagonising donors and development partners. Rather than spend millions of sterling pounds on an ineffective image-building exercise abroad for Sri Lanka, UK-public relations firm Bell Pottinger needs to give a lesson or two here on how to handle donors and multilateral agencies.
|
E-mail
